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Home News Power Sector News Gas pooling proposal on petroleum ministry table

Gas pooling proposal on petroleum ministry table

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LNGThe power ministry has worked out a plan to pool the existing limited supply of domestic gas with imported regasified liquefied petroleum gas to help operationalise stranded gas-based power plants with a cumulative capacity of 16,107 Mw.

The proposal has been forwarded to the petroleum ministry. If implemented, the move will lead to an additional generation of 39,000 million units of power valued at Rs 25,000 crore annually. The Union Cabinet could take up the matter soon for discussion, officials said.

India has 21,211 Mw of gas-based power capacity commissioned. An additional 5,900 Mw is likely to be commissioned soon. Of this, 16,107 Mw is stranded including 6,997 Mw based on KG-D6 allocation and 3,761 Mw commissioned without gas allocation.

According to the proposal, state-run GAIL India will be the pool operator and will supply the fuel to power stations at an average pooled price of domestic and imported gas.

After the pooling, electricity from the plants will be supplied to distribution firms at Rs 5.5 a unit. The ministry has also proposed to subsidise firms operating gas-based stations from the National Clean Energy Fund made up of a cess collected from coal-mining companies. The proposal fixes the cost of gas-based plants at Rs 1.30 a unit of electricity to allow firms to meet financial obligations.

According to the plan, states might have to waive value-added tax (VAT) on incremental gas, gas transporters such as GAIL and Reliance Gas Transportation will be asked to cut pipeline tariff by up to 20 per cent, GAIL would have to cut marketing margin by half. The government had on October 18 announced raising the price of gas from domestic fields by 33 per cent to $5.6 a unit from November 1.

India's domestic gas production fell 13 per cent from 111 million standard cubic metres per day (mscmd) in 2012-13 to 97 mscmd in 2013-14. The output is expected to pick up marginally to 100 mscmd, or 36 billion cubic metres (bcm) in FY15 including 24 bcm from state-run Oil and Natural Gas Corporation, 2.8 bcm from Oil India and 9.7 bcm from production-sharing contracts regime blocks...

Source- Business standard


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